Fixed index annuities

[samclem]

As with any service provider that you hire, you are still responsible for doing your homework to qualify the person you are thinking about hiring.

I'd say less than 10% of people would know how to pick a financial advisor. As has been said often here: By the time you know enough to choose one, you don't need one and can do it yourself. Which is mostly true.

 

[Ready]

I'd say less than 10% of people would know how to pick a financial advisor. As has been said often here: By the time you know enough to choose one, you don't need one and can do it yourself. Which is mostly true.

This is true, but it's true about almost any service provider you hire. Generally if you knew how to do the task yourself you wouldn't need to hire someone.

I know nothing about plumbing but at some point when things break I need to hire a plumber. You can check references, read reviews, ask questions, and do other basic things required to validate the person is a good hire. It's not full proof, but for the most part it works fine.

 

[travelover]

This is true, but it's true about almost any service provider you hire. Generally if you knew how to do the task yourself you wouldn't need to hire someone.

I know nothing about plumbing but at some point when things break I need to hire a plumber. You can check references, read reviews, ask questions, and do other basic things required to validate the person is a good hire. It's not full proof, but for the most part it works fine.

But with a plumber, you know if they did a good job if the pipes don't leak. And the damage they can do is relatively limited. Someone churning your accounts and pulling a nice fee off the top, to boot, can do relieve you of a lot of money without you ever realizing you've been ripped off.

 

[samclem]

You can check references, read reviews, ask questions, and do other basic things required to validate the person is a good hire. It's not full proof, but for the most part it works fine.

But none of those methods work when looking for a good FA. Yelp reviews for an FA? "A great FA! Five stars!!!! He helped me buy a great variable annuity inside my IRA, it even has full return of premiums in case of meteor strike! I never would have found this on my own. And he always sends a nice Christmas card." Similarly, do many of us have friends who can offer a meaningful recommendation for an FA? Credentials-- mean not very much IMO. A person who is a CFP can still sell overpriced insurance products. Maybe we can trust a membership organization, they'll put their members first. AARP surely wouldn't steer an oldster to a high-priced annuity. . .

 

[Ready]

I get it. No method is perfect. But there are crooks in any industry. I've been ripped off numerous times when taking my car in for repairs. There's only so much one can do to protect against this stuff.

But I do agree that the impact can be much more severe with a financial adviser due to the potential commissions they can steer from your portfolio if you give them long enough to do so.

As with any of these types of businesses, it's buyer beware. The uninformed can easily be taken advantage of.

 

[ziggy29]

This is true, but it's true about almost any service provider you hire. Generally if you knew how to do the task yourself you wouldn't need to hire someone.

Sort of. Or else you'd know if the task was more of a hassle than you wanted to deal with, you hire someone. Or if you wanted guaranteed work, you'd find a professional who would stand behind it. And with most services you can tell if the work is shoddy pretty quickly.

It's not just people who don't know how to do something who hire professional help. That said, in the financial industry there is snake oil all over the place, and if someone wants to hire a good fee-only financial planner for a one-time or occasional review of their investments, so be it. But IMO that's about it.